Wrap Text
ANGLOGOLD LIMITED
CORPORATE COMMUNICATIONS DEPARTMENT
1ST FLOOR, 11 DIAGONAL STREET
JOHANNESBURG 2001
TELEPHONE: (+27 11) 637-6147
FAX: (+27 11) 637 6399/6400
JMD/CCD/AGO160.00
27 JULY 2000
ANGLOGOLD RESULTS FOR THE QUARTER AND SIX MONTHS ENDED 30 JUNE 2000
KEY FEATURES
* QUARTERLY RESULTS
- GOLD PRODUCTION IMPROVES BY 3% TO 1.8 MILLION OUNCES (Q1: 1.75
MILLION OUNCES)
- TOTAL CASH COSTS ARE REDUCED BY 5% TO US$207/OZ (Q1: US$219/OZ)
- OPERATING PROFIT INCREASES BY 10% IN RAND TERMS TO R821 MILLION
(Q1: R749 MILLION)
- HEADLINE EARNINGS ARE SLIGHTLY REDUCED BY 0.4% TO R458 MILLION
(Q1: R460 MILLION)
* HALF YEAR RESULTS
- OPERATING PROFIT VIRTUALLY UNCHANGED AT R1,570 MILLION
- ATTRIBUTABLE PROFIT DOWN 48% DUE TO THE INCLUSION OF ABNORMAL
ITEMS IN THE PREVIOUS PERIOD
- INTERIM DIVIDEND PAYMENT OF R7.50 PER SHARE, A 6% YIELD ON A
SHARE PRICE OF R269 PER SHARE
ON THE COMPANY'S PERFORMANCE, BOBBY GODSELL, CHIEF EXECUTIVE OFFICER, COMMENTED
"THE SECOND QUARTER REFLECT GOOD OPERATING RESULTS; WE ARE PARTICULARLY PLEASED
WITH THE IMPROVED PERFORMANCE IN THE SOUTH AFRICAN OPERATIONS. ON THE SAFETY
FRONT, WE ARE ENCOURAGED THAT THE SOUTH AFRICAN MINES RECORDED THEIR
LOWEST-EVER RATE OF LOST TIME INJURIES AND THEIR BEST PERFORMANCE IN REGARD TO
FATALITIES.
THIS IS CLEAR EVIDENCE OF WHAT CAN BE ACHIEVED, AND WE HOPE THIS WILL ENCOURAGE
MANAGEMENT AND EMPLOYEES TO SUSTAINED AND INCREASED EFFORTS IN THIS AREA.
"DURING THE FIRST HALF OF THE YEAR 2000, ANGLOGOLD HAS LAID SOME IMPORTANT
FOUNDATIONS FOR THE COMPANY'S FUTURE GROWTH. THE ACQUISITION OF SIGNIFICANT
STAKES IN THE MORILA AND GEITA MINES IN MALI AND TANZANIA, AS WELL AS THE
COMMENCEMENT OF THE YATELA PROJECT IN MALI WILL SEE THE AFRICAN REGION BECOMING
THE COMPANY'S SECOND LARGEST SOURCE OF EARNINGS AFTER SOUTH AFRICA.
"IN MARKET DEVELOPMENT, WE HAVE FURTHER DEMONSTRATED OUR COMMITMENT TO
EXTRACTING VALUE FROM OUR PRODUCT BEYOND THE CURRENT LIMITS OF MINING. WE
ANNOUNCED OUR E-COMMERCE JOINT VENTURE, GOLDAVENUE, AND THE ACQUISITION OF A
25% STAKE IN SOUTH AFRICA'S LARGEST GOLD JEWELLERY MANUFACTURER, OROAFRICA. WE
REMAIN CONVINCED THAT, IN TODAY'S GOLD MARKET, THE FUTURE OF THE INDUSTRY RESTS
WITH THE ENERGY AND DETERMINATION OF COMPANIES TO INNOVATE AND TO INVEST IN AND
LEAD THEIR INDUSTRY IN THIS WAY."
ON THE GOLD MARKET, KELVIN WILLIAMS, EXECUTIVE DIRECTOR:
MARKETING, SAID:
"NOTWITHSTANDING THE EARLY WEAKNESS IN THE GOLD PRICE, THE QUARTER GAVE CLEAR
SIGNALS OF UNDERLYING SUPPORT LEVELS FOR THE GOLD IN THE MARKET. THE MARKET HAS
CONSISTENTLY HELD UP AGAINST THE PRESSURES OF SHORT SELLING AT AROUND $270 PER
OUNCE AND HAS CONSISTENTLY MANAGED TO REGROUP ABOVE $280 PER OUNCE. THIS
SUPPORT LEVEL UNDERLINES THE IMPORTANCE OF HEALTHY AND RELIABLE
PHYSICAL DEMAND FOR THE METAL. THE POSITIVE IMPACT OF THIS SUPPORT HAS BEEN
CLEAR FOR SOME TIME, ALTHOUGH MARKET TURMOIL LAST YEAR PERHAPS CONCEALED THE
FULL VALUE OF PHYSICAL DEMAND FOR SOME MONTHS IN 1999."
FOR THE COMPLETE REPORT FOR THE QUARTER VISIT THE ANGLOGOLD WEBSITE:
WWW.ANGLOGOLD.COM
QUERIES:
IN SOUTH AFRICA:
STEVE LENAHAN: INVESTOR RELATIONS JAMES DUNCAN: MEDIA RELATIONS
TELEPHONE: +27 11 637 6248 TELEPHONE: +27 11 637 6147
MOBILE: +27 83 308 2200 MOBILE: +27 82 892 8052
E-MAIL: SLENAHAN@ANGLOGOLD.COM E-MAIL:JDUNCAN@ANGLOGOLD.COM
IN THE UNITED KINGDOM: IN AUSTRALIA:
ALEX BUCK ANDREA MAXEY
TELEPHONE: +44 20 7849 5630 TELEPHONE: +61 3 9684 4920
MOBILE: +44 793 274 0452 MOBILE: + 61 438 001 393
E-MAIL: ABUCK@ANGLOGOLD.COM E-MAIL: AMAXEY@ANGLOGOLD.COM.AU
IN THE UNITED STATES OF AMERICA:
CHARLES CARTER
TELEPHONE: 800 417 9255 (US TOLL-FREE)
TELEPHONE: +1 212 750 7999
E-MAIL: CCARTER@ANGLOGOLD.COM
CERTAIN FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS CONTAINED IN THIS DOCUMENT, INCLUDING WITHOUT LIMITATION,
THOSE CONCERNING THE ECONOMIC OUTLOOK FOR THE GOLD MINING INDUSTRY,
EXPECTATIONS REGARDING GOLD PRICES AND PRODUCTION, THE COMPLETION AND
COMMENCEMENT OF COMMERCIAL OPERATIONS OF CERTAIN OF THE COMPANY'S EXPLORATION
AND PRODUCTION PROJECTS, AND THE COMPANY'S LIQUIDITY AND CAPITAL RESOURCES AND
EXPENDITURE, CONTAIN CERTAIN FORWARD-LOOKING STATEMENTS REGARDING THE COMPANY'S
OPERATIONS, ECONOMIC PERFORMANCE AND FINANCIAL CONDITION. ALTHOUGH THE COMPANY
BELIEVES THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE
REASONABLE, NO ASSURANCE CAN BE GIVEN THAT SUCH EXPECTATIONS WILL PROVE TO HAVE
BEEN CORRECT. ACCORDINGLY, RESULTS COULD DIFFER MATERIALLY FROM THOSE SET OUT
IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF, AMONG OTHER FACTORS, CHANGES
IN ECONOMIC AND MARKET CONDITIONS, SUCCESS OF BUSINESS AND OPERATING
INITIATIVES, CHANGES IN THE REGULATORY ENVIRONMENT AND OTHER GOVERNMENT
ACTIONS, FLUCTUATIONS IN GOLD PRICES AND EXCHANGE RATES, AND BUSINESS AND
OPERATIONAL RISK MANAGEMENT
LETTER FROM THE CHAIRMAN AND THE CHIEF EXECUTIVE OFFICER
DEAR SHAREHOLDER
THE RESULTS REPORTED FOR THE SECOND QUARTER REFLECT GOOD OPERATING PERFORMANCE.
GOLD PRODUCTION IMPROVED BY 3% TO 1.8 MILLION OUNCES; BOTH CASH AND TOTAL COSTS
REDUCED BY 5%, AND OPERATING PROFIT INCREASED BY 10%. IN THE CONTEXT OF THE 5%
DECLINE IN THE DOLLAR PRICE RECEIVED FOR GOLD SOLD THIS QUARTER, THIS IS
ENCOURAGING. INCREASED TAXATION, A RESULT OF IMPROVED OPERATING PROFITS IN
SOUTH AFRICA, AND LOWER INTEREST EARNED, A CONSEQUENCE OF THE SIGNIFICANT
INVESTMENTS IN GROWTH NOW BEING MADE BY THE COMPANY, HAVE PRODUCED ATTRIBUTABLE
PROFIT AND HEADLINE EARNINGS DOWN 1% ON THE PREVIOUS QUARTER.
THE BOARD HAS DECLARED AN INTERIM DIVIDEND FOR THE HALF YEAR OF R7.50,
REPRESENTING A DIVIDEND YIELD OF 6% ON TODAY`S PRICE OF R269.
IT IS PARTICULARLY PLEASING TO NOTE THE IMPROVED PERFORMANCE OF THE SOUTH
AFRICAN MINES, WITH THE TWO MAJOR PROFIT PRODUCERS, GREAT NOLIGWA AND TAUTONA,
INCREASING THEIR GOLD OUTPUT BY 19% AND 16% RESPECTIVELY, AND RECORDING
SIGNIFICANT ADVANCES IN ALL KEY EFFICIENCY MEASURES. WHILE THE CORRECTIVE
ACTIONS INDICATED LAST QUARTER HAVE BEEN IMPLEMENTED AT THE BAMBANANI,
ELANDSRAND AND JOEL MINES, AND SOME IMPROVEMENTS ARE EVIDENT, FURTHER WORK IS
STILL NECESSARY. AT THE END OF THE LAST QUARTER WE PUBLISHED A SEPARATE REPORT
ON THE SOUTH AFRICAN OPERATIONS, SETTING OUT PLANS FOR CORRECTING THE
PERFORMANCE OF THESE FIVE OPERATIONS. TODAY WE ARE RELEASING ANOTHER REPORT,
PROVIDING AN UPDATE ON THE PROGRESS TO DATE AT THESE MINES*. FOR THE SOUTH
AFRICAN REGION AS A WHOLE, GOLD PRODUCTION IMPROVED BY 2%, AND BOTH THE VOLUME
AND VALUE MEASURES OF LABOUR PRODUCTIVITY ROSE BY 11% AND 4% RESPECTIVELY,
NOTWITHSTANDING AN AVERAGE GRADE THAT WAS 2% LOWER THAN THE PREVIOUS QUARTER.
IT IS EQUALLY ENCOURAGING THAT THIS QUARTER SAW THE SOUTH AFRICAN MINES RECORD
THEIR LOWEST EVER RATE OF LOST TIME INJURIES AND THEIR BEST PERFORMANCE IN
REGARD TO FATAL ACCIDENTS. THIS IS CLEAR EVIDENCE OF WHAT CAN BE ACHIEVED, AND
WE HOPE THIS WILL SPUR MANAGEMENT AND EMPLOYEES TO SUSTAINED AND INCREASED
EFFORTS IN THIS AREA.
OPERATING PROFIT FOR THE HALF YEAR TO JUNE AT R1,570 MILLION IS COMPARABLE TO
THE FIRST HALF OF 1999, ALTHOUGH HEADLINE EARNINGS BEFORE THE DEFERRED TAX
ADJUSTMENT AT R916 MILLION WERE DOWN 7% FROM R983 MILLION. THIS WAS AS A
CONSEQUENCE OF LOWER NET INTEREST EARNINGS AND LOWER EARNINGS FROM ASSOCIATES.
ATTRIBUTABLE PROFIT IS 48% DOWN ON THE FIRST HALF OF 1999 DUE TO THE EFFECT OF
A DEFERRED TAX RATE CHANGE, WHICH WAS REDUCED BY THE WRITE-OFF OF GOODWILL
INCLUDED IN THE PREVIOUS YEAR.
DURING THE FIRST HALF OF THIS YEAR ANGLOGOLD LAID SOME IMPORTANT FOUNDATIONS
FOR THE COMPANY`S FUTURE GROWTH. THE ACQUISITION OF SIGNIFICANT STAKES IN THE
MORILA AND GEITA MINES IN MALI AND TANZANIA RESPECTIVELY, AS WELL AS THE
COMMENCEMENT OF THE YATELA PROJECT IN MALI WILL SEE THE AFRICAN REGION BECOMING
THE COMPANY`S SECOND LARGEST SOURCE OF EARNINGS AFTER SOUTH AFRICA. THE MAJOR
PIT EXPANSION AT SUNRISE DAM IN AUSTRALIA SECURES SIGNIFICANT PRODUCTION FOR A
NUMBER OF YEARS TO COME.
THE E-COMMERCE VENTURE, GOLDAVENUE, AND THE ACQUISITION OF A 25% STAKE IN SOUTH
AFRICA`S LARGEST GOLD JEWELLERY MANUFACTURER, OROAFRICA, BOTH ANNOUNCED DURING
THE QUARTER, PROVIDE ANGLOGOLD WITH SKILLED AND EXPERIENCED PARTNERS AND ARE A
FURTHER DEMONSTRATION OF ANGLOGOLD`S COMMITMENT TO EXTRACTING VALUE FROM ITS
PRODUCT BEYOND THE CURRENT LIMITS OF MINING.
WE ARE EQUALLY ENTHUSIASTIC ABOUT GOLD`S POTENTIAL TO CONTRIBUTE TO A CLEANER,
HEALTHIER ENVIRONMENT IN THE FUTURE. DURING THE QUARTER, WE LAUNCHED PROJECT
AUTEK, AN EQUAL JOINT VENTURE BETWEEN ANGLOGOLD AND MINTEK, SOUTH AFRICA`S
NATIONAL METALLURGICAL RESEARCH ORGANIZATION, TO DEVELOP GOLD`S APPLICATION IN
CATALYSIS AND OTHER ENVIRONMENTALLY SENSITIVE INDUSTRIAL USES.
WE REMAIN CONVINCED THAT, IN TODAY`S GOLD MARKET, THE FUTURE OF THE INDUSTRY
RESTS WITH THE COMPANIES THAT HAVE THE ENERGY AND DETERMINATION TO INNOVATE, TO
INVEST IN AND TO LEAD THEIR INDUSTRY.
* THIS REPORT IS AVAILABLE ON THE ANGLOGOLD WEBSITE, HTTP://WWW.ANGLOGOLD.COM
NICKY OPPENHEIMER
CHAIRMAN
BOBBY GODSELL
CHIEF EXECUTIVE OFFICER
26 JULY 2000
SUMMARY OF OPERATIONS
SOUTH AFRICA
OVERALL PERFORMANCE
PRODUCTIVITY AND EFFICIENCY INDICATORS FOR THE OPERATIONS IN THE SOUTH AFRICAN
REGION HAVE SHOWN MOST ENCOURAGING IMPROVEMENTS. MEASURED IN SQUARE METRES PER
EMPLOYEE, PRODUCTIVITY WAS UP BY 11% QUARTER-ON-QUARTER, WHILE EFFICIENCY,
MEASURED IN GRAMS PER EMPLOYEE, INCREASED BY 4% DESPITE AVERAGE GRADE RECOVERED
BEING 2% LOWER QUARTER-ON-QUARTER.
SIGNIFICANTLY IMPROVED PERFORMANCE AT GREAT NOLIGWA AND TAUTONA, TOGETHER WITH
CONTINUED STRONG PERFORMANCES FROM KOPANANG, TAU LEKOA, TSHEPONG, SAVUKA AND
ERGO, RESULTED IN GOLD PRODUCTION INCREASING BY APPROXIMATELY 2% OVER THE
PREVIOUS QUARTER TO 42,640 KILOGRAMS (1.4 MILLION OZ).
TOTAL CASH COSTS AT R47,574 PER KILOGRAM
(US$216 PER OUNCE) WERE CONTAINED TO A 2% INCREASE OVER THE PREVIOUS QUARTER,
NOTWITHSTANDING AN 8% INCREASE IN AREA MINED AND A 3% INCREASE IN DEVELOPMENT
ACTIVITY.
WE REGRET TO REPORT THE DEATH OF TEN EMPLOYEES DURING THE QUARTER. IMPORTANTLY,
HOWEVER, WE NOTE THE SIGNIFICANT IMPROVEMENT IN THE SAFETY PERFORMANCE OF THE
SOUTH AFRICAN REGION OVER THE PREVIOUS QUARTER AND THE CORRESPONDING PERIOD
LAST YEAR. THE NUMBER OF LOST TIME INJURIES FOR THE QUARTER IS THE LOWEST ON
RECORD, IMPROVING BY 19 ON THE PREVIOUS BEST RECORD IN THE LAST QUARTER OF
1999. IT IS VERY ENCOURAGING TO NOTE THAT IN THE QUARTER BOTH MOAB KHOTSONG AND
GREAT NOLIGWA RECORDED LOST TIME INJURY FREQUENCY RATES BELOW THE ONTARIO
BENCHMARK.
MINE PERFORMANCE
PRODUCTION LEVELS AT GREAT NOLIGWA IMPROVED IN THE SECOND QUARTER. GOLD
PRODUCTION WAS 19% HIGHER WITH IMPROVEMENTS IN BOTH AREA MINED AND GRADE.
KOPANANG HAD AN EXCELLENT SECOND QUARTER, IMPROVING GOLD PRODUCTION AND LABOUR
EFFICIENCIES OVER THE PREVIOUS QUARTER. TAU LEKOA REPORTS EXCELLENT RESULTS
WITH GOLD PRODUCTION 8% ABOVE THE PREVIOUS QUARTER AND ALL EFFICIENCY
PARAMETERS EXCEEDING THE LEVELS REPORTED FOR THE MARCH QUARTER.
GOLD OUTPUT AT BAMBANANI FELL BY 7% OVER THE PREVIOUS PERIOD, MAINLY DUE TO
CONTINUED DISAPPOINTING GRADES. AT TSHEPONG, PRODUCTION AND EFFICIENCY
(MEASURED IN SQUARE METRES AND GRAMS PER EMPLOYEE) SHOWED SIGNIFICANT
IMPROVEMENT OVER THE PREVIOUS QUARTER, INCREASING BY 12% AND 15% RESPECTIVELY.
THE RESULTS AT MATJHABENG REFLECT THE SCALING DOWN OF OPERATIONS, PRIOR TO
SHAFT CLOSURES. DESPITE A SIGNIFICANT INCREASE IN MINING VOLUME AT JOEL, A DROP
OF 11% IN THE GRADE AND PROBLEMS IN THE GOLD RECOVERY SYSTEM LED TO AN 8%
DECREASE IN GOLD PRODUCTION AGAINST THE PREVIOUS QUARTER.
MANAGEMENT FOCUS ON THE MOST PROFITABLE MINING PANELS AT TAUTONA HELPED IMPROVE
THE AREA MINED, GRADE AND GOLD PRODUCTION (WHICH INCREASED BY 16%) OVER THE
PREVIOUS QUARTER. ALL EFFICIENCY PARAMETERS SHOWED IMPROVEMENTS. DESPITE HIGH
LEVELS OF SEISMICITY AT SAVUKA, THE OPERATION MAINTAINED MINING VOLUME AND GOLD
OUTPUT AT THE PREVIOUS QUARTER`S LEVELS.
MPONENG WAS UNABLE TO SUSTAIN THE EXCEPTIONALLY HIGH GOLD PRODUCTION OF THE
PREVIOUS QUARTER. SEISMICITY CAUSED THE LOSS OF HIGH GRADE AREAS AND VOLUMES
WERE INCREASED FROM LOWER GRADE AREAS TO REPLACE THE LOST PRODUCTION. THE
EQUIPPING PROGRAMME AT THE MPONENG DEEPENING PROJECT HAS BEEN COMPLETED AHEAD
OF SCHEDULE. GOLD OUTPUT AT ELANDSRAND, DESPITE A VOLUME INCREASE, WAS 6% DOWN
ON THE PREVIOUS QUARTER AS A RESULT OF LOWER GRADES MINED. DAMAGE TO HIGH GRADE
FACES THROUGH SEISMICITY, COUPLED WITH A DROP IN ORE VALUES IN THE EASTERN
SECTION, CONTRIBUTED TO THE LOWER GOLD PERFORMANCE AT DEELKRAAL.
ERGO IMPROVED ITS EFFICIENCIES AND PROFIT PERFORMANCE OVER THE PREVIOUS QUARTER
DESPITE VARIOUS PRODUCTION DELAYS EXPER
Sharenet Sites 
